Deflation and Monetary Policy in a Historical Perspective: Remembering the Past or Being Condemned to Repeat It? / Michael D. Bordo, Andrew Filardo.

Format:

Book

Author/Creator:

Bordo, Michael D.

Contributor:

National Bureau of Economic Research.

Filardo, Andrew.

Series:

Working Paper Series (National Bureau of Economic Research) no. w10833.

NBER working paper series no. w10833

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Deflation and Monetary Policy in a Historical Perspective

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

What does the historical record tell us about how to conduct monetary policy in a deflationary environment? We present a broad cross-country historical study of deflation over the past two centuries in order to shed light on current policy challenges. We first review the theoretical literature on deflation. We then characterize deflation by distinguishing among the "good, the bad and the ugly" ones - considering both empirical determinants and historical narratives of each type. Emphasis is put on the linkages between the current inflation environment and that of the gold standard period. Particular attention is also put on what the historical record reveals about policies to escape undesirable deflation. In this regard we develop a policy typology based on the relative merits of interest rate and monetary instruments in combating different types of inflation/deflation behavior.

Notes:

Print version record

October 2004.